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Apple Faces Federal MONOPOLY Suit


robotskip
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LOL.

 

http://www.windowsitpro.com/Article/Articl...4761/94761.html

 

Apple Computer finally knows what it's like to be Microsoft: a company that thoroughly dominates a market, shutting out its competition through artificial links between its products. Unfortunately, with that kind of success comes increased scrutiny, and thanks to a recent federal ruling, Apple is about to find itself in court facing illegal monopoly charges.

 

An intensely private company, Apple currently faces several lawsuits, most of which are in the process of obtaining class-action status. But only one lawsuit has the potential to harm the company in a manner similar to Microsoft's epic federal antitrust battle. Last July, a class-action lawsuit alleged that Apple's decision to tie music sold from its iTunes Store to its dominant iPod device was illegal, threatened competition, and harmed consumers.

 

In fact, the charges specifically refer to the Sherman Antitrust Act, which played a prominent role in Microsoft's United States antitrust trial, and allege that Apple has unlawfully tied and bundled products, obtained and maintained a monopoly, and attempted to extend that monopoly into new markets. The charges also extend to various state antitrust laws, such as California's Cartwright Act.

 

Apple sought to have the suit thrown out. But in a December 20, 2006, ruling, US District Judge James Ware denied Apple's request, letting the lawsuit go forward. "Apple has presented no reason for the Court to dismiss the Cartwright Act claim or the common law monopolization claim while allowing Plaintiff's federal antitrust claims," the court order reads. "The Court denies Apple's Motion to Dismiss Plaintiff's anti-trust claims."

 

The plaintiff's complaint presents a stark look at Apple's strategies in the digital media market. "Apple deliberately makes digital music purchased at [the iTunes Store] inoperable with its competitors' digital music players," the complaint reads. "In order to play music from [the iTunes Store] on a digital music player, then, a consumer's only option is the iPod. Apple sells the iPod at prices far exceeding those that would prevail in a competitive marketplace. Apple also makes the iPod unable to play music sold at its competitors' online music stores. In order to purchase Online Music to play on an iPod, then, a consumer's only option is [the iTunes Store]."

 

The plaintiffs also highlight a dirty secret about the iPod that hasn't gotten much press outside of WinInfo: The underlying iPod hardware, which PortalPlayer manufactures, natively supports Microsoft's Windows Media Audio (WMA) format, making the iPod compatible with most competing online music services. But Apple shuts this compatibility feature off in the iPod with what Ware calls "crippleware." The order also notes that Apple is using the same strategy to shut out competition in the nascent video-download market.

/grabs popcorn

 

Oh, and another interesting thing.

 

Apple/Steve Jobs have not being cleared in the whole tax/stock debacle thing they're in, just a bunch of silly Mac sites reported some somewhat accurate info but blew it out of proportion.

 

/grabs another bag of popcorn and some soft drink

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might as well sue microsoft, with their "plays for sure" policy.

 

 

anyway who cares, the worst that could happen is apple will have to add wma support on the ipod(just a firmware update) but apple's drm is not to protect it from being put on other players ,its that these players dont support the drm to manage the user's songs rights.

 

If people dont want to buy songs on iTunes then so be it, apple has the drm power to allow what they allow you to do with it. Go buy from another site if you want to put it on a different player.

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might as well sue microsoft, with their "plays for sure" policy.

anyway who cares, the worst that could happen is apple will have to add wma support on the ipod(just a firmware update) but apple's drm is not to protect it from being put on other players ,its that these players dont support the drm to manage the user's songs rights.

 

If people dont want to buy songs on iTunes then so be it, apple has the drm power to allow what they allow you to do with it. Go buy from another site if you want to put it on a different player.

PlaysForSure is a 'certification' available from Microsoft which is available to any company which has a portable media player or content service which passes the certification. Yeah, that's quite a monopoly there. :thumbsup_anim:

 

But thanks for playing.

 

Anyone can choose not to get Windows yet there was that whole monopoly thing awhile back, eh ?

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they can't go after Zune: it's a failure! :2cents:

But really, if someone has their whole library in iTunes and wants to get a different mp3 player, all they have to do is find a different player and copy over the music. Hell, i'm sure you could drag and drop... if it's in AAC, convert it to mp3 within itunes first, then drag it over!

But why would anyone want to get a different mp3 player than the iPod? Or switch from iTunes?

I think the lawsuit should be for greatly designed hardware and software. It should be illegal to create products that look so nice and function so well. Shut down Apple, NOW! (and if it's going down, please, take me with it. I want a nice spot in heaven!)

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- Zune can't be deemed a failure, not this early.

- You just don't get what this is about as taken from your second sentence.

- There are other choices, many of which are better.

Actually, I do think the Zune can be called a failure. And isn't it funny that Apple is said to have a monopoly only when Microsoft enters the market? Hmm...

 

And yes, I do think I know what this is about, but I really don't have the time to sit and chat to you about it. I believe Apple does not hold a monopoly, just like I believe that Microsoft doesn't have one (although most people think so, hence my previous statement). In economics, a monopoly (from the Greek monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a kind of product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. - wikipedia. It isn't Apple's fault if other vendors suck. And it isn't Microsoft's fault that Apple hasn't historically made enough sales to sustain itself. (of course, winds are blowing in other directions now...)

 

Finally, your thing about other choices... no. Just...no. Millions of millions of people have spoken, and they all say iPod and iTunes are the greatest.

 

I believe them,

 

Urby

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How can it be a monopoly if you develop a product that's tied to another one of your products? Microsoft has a monopoly because they didn't invent/manufacture the computers which their OS runs on. With Apple, it's considerably different.

 

I don't think they really have a case here.

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No, right now there is no ultimate 'Zune is/isn't a failure.' <_<

 

No, you don't get it, if you did you wouldn't have made that little comment attempting to say people are stuck to using iTunes with all their music, etc. Oh, if you don't have the time to 'sit and chat' just don't reply, no one is asking you to, not even me. :huh:

 

And since when is the mob right ? Everyone uses Windows so does that automatically mean it's the best ? You people are so two-faced sometimes, it's ridiculous. :rolleyes:

Edited by robotskip
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How can it be a monopoly if you develop a product that's tied to another one of your products? Microsoft has a monopoly because they didn't invent/manufacture the computers which their OS runs on. With Apple, it's considerably different.

 

I don't think they really have a case here.

 

It's a monopoly when you have anti-competitive behavior in a market where you have almost all market share. Love or hate Apple, I'm pretty sure there's a case somewhere in this. And even if you love Apple, isn't this good for everybody? It either a) opens the music store to all players, ;) opens the iPod to all music stores or c) does nothing. Considering the deep pockets at Apple, I can't see this case harming anyone at all. Only helping consumers.

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Its very bad for bussines, Apple haters, like Roboskip a real mole here in these forums, are just trying to snip the ipod from his top place, they are trying to do it just to get the Zune instead. Why? because they hate Steve? why? probably they need some Psicoanalisis.

 

Anyway, Fairplay the Apple DRM is a soft DRM (something that Bill hates) and it protects the downloaded music from itunes so it can only play in certain quantity of devices (all of them ipods, but we are refering here to Quantity not diversity) and it can NOT be shared to another Apple computer or windows computer and/or used in another itunes software, just that.

 

Fairplay is a good DRM system, its SOFT, you can burn your itunes into a CD and then you can Rip them to mp3 or anything, u dont need to crack Fairplay to do it, the idea is to support the costumer and the owners of the music BOTH (not like the Crappy Microsoft new version of DRM -ex playforsure- wich now kicked the ass of their ex associates and only plays in ZUNE AND it can be SQUIRTED and live for a short period in other Zunes) .

 

So ? do you think an open system is good ? no DRM? Fairplay and Apple are just in the middle if it comes down teh Music companys will be able to have more secure (like MS ones) DRM protections. The only company impeding these is Apple cause they have the ITS wich sells legal music, nobody else does, not significantly at least) -allofmp3 isnt legal btw- not in America anyway.

 

And the Tax scandal, its really no problem for steve, any lawyer i have talked to says so.

 

Sorry for the long post..

Edited by aberracus
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Its very bad for bussines, Apple haters, like Roboskip a real mole here in these forums, are just trying to snip the ipod from his top place, they are trying to do it just to get the Zune instead. Why? because they hate Steve? why? probably they need some Psicoanalisis.

 

Anyway, Fairplay the Apple DRM is a soft DRM (something that Bill hates) and it protects the downloaded music from itunes so it can only play in certain quantity of devices (all of them ipods, but we are refering here to Quantity not diversity) and it can NOT be shared to another Apple computer or windows computer and/or used in another itunes software, just that.

 

Fairplay is a good DRM system, its SOFT, you can burn your itunes into a CD and then you can Rip them to mp3 or anything, u dont need to crack Fairplay to do it, the idea is to support the costumer and the owners of the music BOTH (not like the Crappy Microsoft new version of DRM -ex playforsure- wich now kicked the ass of their ex associates and only plays in ZUNE AND it can be SQUIRTED and live for a short period in other Zunes) .

 

So ? do you think an open system is good ? no DRM? Fairplay and Apple are just in the middle if it comes down teh Music companys will be able to have more secure (like MS ones) DRM protections. The only company impeding these is Apple cause they have the ITS wich sells legal music, nobody else does, not significantly at least) -allofmp3 isnt legal btw- not in America anyway.

 

And the Tax scandal, its really no problem for steve, any lawyer i have talked to says so.

 

Sorry for the long post..

 

Erm, pretty much all current DRM schemes suffer from the "analog hole". Don't think Apple's DRM is any less evil than anyone elses. Moreover Dr. Evil, Mr. Bill Gates, stated in an interview that he too hates stronger DRM schemes, and finds it unfortunate that the real bastards here, the MPAA/RIAA require such schemes. Focus your fanboy hate on them instead.

 

But the bottom line is, the only reason you have for claiming that "Its very bad for bussines" [sic], is because you say so. You are wrong. iTMS and the iPod have such established market dominance that opening either the iPod to alternative music stores, or iTMS to alternative players, will only offer more choice to consumers. Most likely people will keep buying iPods and getting their music from iTMS, leaving Apple relatively unharmed, but allowing for consumers to have the final say. The question I must ask then, is would you rather have a crappier product to make Apple a few more bucks? I'd rather see Apple loose a paltry sum which will most likely be written off in some taxes or another somewhere, and have greater choice.

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Just say no to any DRM it's just bad for the consumer. I still don't see the issue as long as it plays uninfected mp3 files. The only being damaged are the suckers buying crippled drm stuff so it's a good thing to showup how silly any Drm is.

Edited by myzar
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what about Zune, which uses a proprietary media format?

 

 

no it doesnt, it uses plays for sure .wav files, .mp3, and other common files, and plays for sure is a type of DRM that microsoft and some other companys got together and designed so that there could be a "standard" increasing compatibility across the board and making a label for consumers (the ones that cant research or dont know what DRM is....) so that they know if the DRMed music that they use from the online store they use is compatible, no question, so they can use their existing DRMed purchased music.... and this is about itunes, not the format.... and zune does not have any crippleware limiting what it can sync on, although it does have a horrible "feature" that is that it DRM's your music upon sync.....

 

and Swad, microsoft's monopoly case was all based on Internet Explorer (bundled with windows) because they stated that since it was bundled with the computers and the os then others such as netscape navigator could not compete because the others had to be downloaded over a slow dialup connection (at the time all that regular people had access to).... except this is different, instead of just coming with it they make it so you HAVE TO use itunes.... intentionally through crippleware, they have the compatibility code, its just locked away in the devices, witch is like... buying a computer that can only run one os because of a chip that blocks out the installation of others, or for example in m$ case, if windows blocked the running of any other web browser and made it so you could only use Internet Explorer (that would be absolute hell to say the least....)

 

and DIE DRM, its not stopping any of the pirates, its just an annoyance for people who LEGALLY PURCHASED COPYS!!!! DRM makes me want to pirate music more for fear of a rootkit rather than stopping me from putting it on the internet. i totally agree with myzar.

 

and no one can tell if zune is a faliure... although i do not like it, it seems that the market is looking for a good iPod alternative (from a major corporation theyve heard of before, remember, these are the same people who dont know what DRM is.... )

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Its very bad for bussines, Apple haters, like Roboskip a real mole here in these forums, are just trying to snip the ipod from his top place, they are trying to do it just to get the Zune instead. Why? because they hate Steve? why? probably they need some Psicoanalisis.

 

Anyway, Fairplay the Apple DRM is a soft DRM (something that Bill hates) and it protects the downloaded music from itunes so it can only play in certain quantity of devices (all of them ipods, but we are refering here to Quantity not diversity) and it can NOT be shared to another Apple computer or windows computer and/or used in another itunes software, just that.

 

Fairplay is a good DRM system, its SOFT, you can burn your itunes into a CD and then you can Rip them to mp3 or anything, u dont need to crack Fairplay to do it, the idea is to support the costumer and the owners of the music BOTH (not like the Crappy Microsoft new version of DRM -ex playforsure- wich now kicked the ass of their ex associates and only plays in ZUNE AND it can be SQUIRTED and live for a short period in other Zunes) .

 

So ? do you think an open system is good ? no DRM? Fairplay and Apple are just in the middle if it comes down teh Music companys will be able to have more secure (like MS ones) DRM protections. The only company impeding these is Apple cause they have the ITS wich sells legal music, nobody else does, not significantly at least) -allofmp3 isnt legal btw- not in America anyway.

 

And the Tax scandal, its really no problem for steve, any lawyer i have talked to says so.

 

Sorry for the long post..

What the hell are you talking about ?

 

I don't hate Apple or any of it's products and if I did, why do I use them and even promote them ? I bought myself an iPod Nano for my holiday and I was damn glad I did, the battery life was amazing on that thing and I also use many Apple products (I've owned Macs, etc) and prefer many products over competitors (I'd take OSX over XP any day but I'd also now take Vista over OSX, maybe Leopard will be good).

 

See, there are 2 main reasons you would make up things like this, 1, I don't blindly love Apple and I'm neutral and you take it that if someone dares post something negative about Apple they're automatically a 'hater.' 2, you have too much faith and love for Apple and you can't bare that Apple isn't perfect.

 

Please, for the love all that is good, stop making things up, aberracus. Oh, and by 'Psicoanalisis' I assume you mean psychoanalysis and in that case, that was a really pathetic call and only further proves my 'reasons' you would make up things.

 

- For the record, you people need to stop trying to make these threads into personal attacks against me and instead just focus on the topic. I mean, what the heck do you gain from lying and assuming ridiculous things ? Nothing, well, besides looking silly and lame.

 

----

 

How is the DRM by Microsoft more 'secure' ? In many instances it's more lenient ,for example, more allowed re-downloads. Also, many, many companies sell music digitally, legally, how the hell could you try and say that there aren't ?

 

Also, you make some illiterate comment about how the iTunes/iPod combo attempts to support both the customer and the owner yet your whole paragraph is incoherent and there is some unrelated rubbish about sending files on the Zune.

 

Fairplay isn't better/worse than any other major DRM at the moment and it will probably be awhile till something decent is put forward by a company.

 

Burning iTunes DRM'd songs onto a cd than ripping it is not legal and is not allowed.

 

Oh, you spoke to lawyers, gee, Apple is completely in the clear, thanks to you.

Edited by robotskip
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it seems that the market is looking for a good iPod alternative

Here here. I do own an iPod but I must say I wish there were other viable competitors (viable being the operative word) to choose from, so I at least had a choice between different feature sets. I'm sure others will agree that the iPod is NOT perfect by any means. Plus, sHARD's right; this can only be good for consumers. More choice. Apple may stand to lose a little profit with lost music store business; that's why it had to go to court.

 

The all-inclusive system Apple loves so much with their computers and OS doesn't exactly apply in the music/movie business. "Third party" music files pose almost no threat to the iPod in terms of muddying the "experience", thus there isn't a logical reason to limit compatibility. Besides profit protection, of course.

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Sorry Robotskip, English isnt my first language, probably you could do better than me in spanish?

 

Anyway im gona cite Roughlydraft:

 

"According to proponents of this myth, Apple's iTunes is unfairly locking Microsoft, Real, and Sony out of the market for digital music by blocking rivals’ efforts to put their own DRM systems on iPods, and is using vendor lock in to distort the market for online music and players. They're wrong, here's why.

 

Why the Myth was Woven

This myth was created by an unlikely coalition of DRM supporters and free software advocates. The DRM supporters are upset that their own systems haven't taken off, while free software advocates don't want any DRM at all. Apple's FairPlay fits solidly in the targets of both extremes.

 

Because of that, many DRM advocates are spinning their comments to suggest they now believe that DRM is bad for consumers. In reality, they are really just embittered by Apple's success. Bill Gates, one of the foremost proponents of DRM, recently made comments along those lines.

 

Bill Gates' Unlikely Attack on DRM

How could that be? Remember it was Gates who presented Palladium--an impenetrable new hardware-enforced DRM architecture--as his vision of the future for PCs.

 

Gates was also the visionary behind Janus DRM for music, and brought "phone-home" activation DRM to Windows and Office. He certainly has no interest in free software idealism and open content.

 

His company targeted the removal of MP3 and sought to roll out WMA in its place as an impossibly secure DRM system that doesn’t just limit unauthorized mass duplication, but actually allows content creators to destroy consumers' music and movies the moment users stop paying for ongoing rental fees.

 

When that heavy handed approach backfired, Microsoft found itself as a bit player, evicted from materially participating in the online music and movie industry and sitting on years of expensive, but now useless development work designed primarily to police a failed business model: exploding media rentals.

 

Microsoft’s Failure Recycling

In typical Microsoft style, the first tactic for dealing with failure is to rebrand a failed technology under a different name. When that fails, the second tactic involves going on the offensive to attack successful products with FUD and unrealistic vaporware promises until a new product can be invented to compete in the race.

 

In this case, Janus and PlaysForSure were rebranded under the Zune logo. As that "new" product's dramatic failure unfolds, Gates has inexplicably lashed out at “DRM,” which quite pointedly means Apple's competing iTunes, the only DRM system that has succeeded in the market for online music.

 

Gates says DRM “causes too much pain for legitimate buyers" and that no one has done it right yet. What he means of course, is that the billion and a half tracks Apple has sold so far through iTunes have done nothing to enrich Microsoft. The solution demands reconfiguring the market so that Microsoft owns everything.

 

Gates Sings a Saccharine Song to Bloggers

Gates made those comments in a meeting with bloggers, none of whom were fans of DRM. It's not surprising that he told them exactly what they wanted to hear as he handed them free Zunes and downplayed its DRM-driven features.

 

What was probably most surprising was that every blogger in attendance at the meeting had a Mac, and were effortlessly using an ad hoc Airport Express wireless network. Michael Arrington reported highlights of the meeting, which included the "look on Gates’ face" at seeing so many Macs brought to Microsoft's headquarters.

 

Mac sightings have grown increasingly common; Mark Hurd, the CEO of HP, recently questioned why so many analysts were bringing Mac Book Pro laptops to HP meetings; Arik Hesseldahl of BusinessWeek reported that HP hardware wasn't the issue, but rather the problems associated with running Windows.

 

Are iTunes Users Locked In?

Vendor lock in distorts the functioning of free markets. Given a choice, the market will select the best product at the best price. However, if consumers are artificially tied to a product, they can't choose other options. Vendor lock in results in expensive or inferior products being more popular, simply because there are no alternatives.

 

Consider Windows: Both Gates and Hurd were surprised to see Macs in corporate IT settings because over the last decade, Windows has become by far the most popular desktop operating system. Did the market select Windows by choice as the best option, or are users forced to buy Windows because of vendor lock in?

 

Now compare iTunes and the iPod: Apple currently enjoys a majority share of both the music player and online music markets. Is that because people choose to buy iPods, or because the market offers no choice in competing models and is distorted by vendor lock in?

 

Vendor Lock In Examples

Vendor lock in is commonly used in various degrees to create buyer loyalty. If customers are stuck using a product, they are obviously less likely to defect to competing products. Vendors like lock in.

 

However, if vendor lock in becomes the only reason why customers use a product, the vendor will often fail to remain competitive and allow the quality and value they offer to slide. Eventually, that leaves an opening for potential competition. Consider some examples:

 

- QuarkXPress quickly became the de facto professional desktop publishing application. Its extension plugins and closed document file type helped lock publishers to the system, leaving little room for competition.

 

Quark relied on vendor lock in to keep prices high, introduce unreasonable licensing, and let its product coast along with minimal advances. Quark particularly slipped when it made little effort to support Mac OS X. It lost its clear lead as a result, because customers were induced to try alternatives, particularly Adobe InDesign.

 

- In the late 80's, Apple focused entirely on the high end of the desktop market in Macintosh sales.

 

Mac development, lead by Jean Louis Gassée, intentionally targeted higher prices because the company's customers were ready to pay more for the system, and could be forced to because there were no options.

 

Rather than working to remain competitive, Apple grew soft and unfocused while letting Microsoft build a cheaper alternative based on the DOS PC. By the mid-90s, Apple's position as the leader in graphic desktop operating systems was taken by Microsoft.

 

- Over the last decade Microsoft has allowed Windows to repeatedly slip. It issued a flurry of increasing bad DOS-based versions well into 2000. Since then, it has similarly slipped its significant update to Windows XP.

 

Meanwhile, Microsoft is raising prices and introducing increasingly invasive DRM into Windows Vista to prevent users from doing things such as reusing licenses they have already bought on an upgraded computer.

 

- In the video game world, Microsoft has worked to lock games development to Windows PCs using DirectX. That vendor lock in has been extended to console video games in the Xbox line, which uses the same proprietary technologies to tie game development to Microsoft’s products.

 

- All closed platforms, from the Xbox and PlayStation game consoles to Windows and Mac OS X, seek to tie unique software to the platform in order to make its systems more attractive.

 

Vendor lock in is everywhere in varying amounts. However, of all the examples of vendor lock in technology, Apple's iTunes is the weakest possible, because it is completely optional and easy to unlock.

 

Optional Lock In Is Not Lock In

The easiest way to pull apart the iTunes Vendor Lock In Myth is to point out that DRM content in iTunes is completely optional. Customers can use their existing MP3s, rip their own CDs, and download podcasts using iTunes, all without touching any DRM at all.

 

There are no features on the iPod that demand DRM. Conversely, Microsoft's iPod alternatives are full of DRM, and vendor lock in is a major component of the strategies used in designing both the players and the music services to which they are tied.

Microsoft's PlaysForSure and Zune both make DRM subscription music a centerpiece strategy; that requires complex DRM on the player. On the iPod, subscription music isn’t even an option; by intentional design, it can't delete your content or prevent you from listening to it after a set expiration date.

 

Wireless sharing, the highly touted feature of Zune, is similarly encrusted with DRM restrictions. Even if the device does not re-encode the files, it does quarantine them to prevent second hand sharing and terminates them after a set time period. Neither DRM function is even possible on the iPod.

 

Unlockable Lock In Is Not Lock In

Besides being entirely optional, DRM content from iTunes also allows easy user access. While providing a barrier to the mass duplication and dumping of commercial content on sharing sites, iTunes makes it easy to burn purchased music to CD, which can then be used in a car CD changer, or used with other players.

 

Is there tie in between the purchased content from iTunes and the iPod? Yes. Is it an example of vendor lock in that is at all comparable to other closed platforms? No.

 

It's nothing like Quarks' proprietary software or Microsoft's DirectX development, where content is permanently tied to a single system in a way that is expensive or impossible to work around. Unlike proprietary platforms such as Windows, the Mac, and game consoles, where titles only work on a target system, music plays everywhere.

 

Anyone harping on iTunes and vendor lock in needs to stop and think:

 

•Can you push a button on an Xbox and dump out Xbox games on a CD that will play on a PlayStation?

•Can you do anything similar on the Sony PSP, allowing your games to work on a Nintendo DS?

•Can you export Windows Office apps from a Windows PC into a form that works on Linux or a Mac?

 

No, in all cases you have to buy a new version or--if the vendor doesn't support your platform--go without. Those are all examples of vendor lock in, and their fairness or “damage” to affected markets is debatable.

 

The problem of vendor lock in does not even apply to the iPod and consumers who have bought music from iTunes, which can all be popped out on a CD and used anywhere.

 

Much Ado About Nothing

That being the case, why haven’t we heard anything about the evil vendor lock in of Windows, or the Xbox, or any number of other platforms?

 

Why is vendor lock in only related to iTunes music? Why do consumers need to be warned about a problem that doesn’t exist? Easy answer: iTunes is a problem for vendors of abusive DRM."

 

 

ABUSIVE DRM

 

"The market for digital music was repressed for nearly a decade prior to the arrival of Apple's iPod. Here's why digital music languished for so long, how Apple was able to build a digital business, and why rivals are struggling to turn back the clock and return digital downloads into a legal black hole of onerous restrictions.

 

The Music World Before DRM

Throughout the 1980's, the word for portable music was Walkman. Sony introduced its compact cassette tape player in 1979, and maintained the popularity of its trademark for nearly twenty years. Sony's Walkman was simple, small, and easy for users to figure out. There was no copy protection.

 

The cassette tapes used in the Walkman and similar players were actually originally introduced by Phillips in the early 60's. Both blank and prerecorded cassette tapes were easy to find, relatively cheap, and worked in a variety of players, including non-Sony personal players, larger portable boom boxes, and home console stereo systems. It was easy to create mix tapes from records, radio, or live recordings.

 

Rise of the Digital Machines

By the late 80's, the limitations of cassette tape began to show. Sony and Phillips had introduced the optical digital Compact Disc back in 1982, but it gained little adoption until the late 80s because of the high initial price for both players and media.

 

Further, there was no way for users to record their own content on CDs, and there wouldn't be for nearly a decade. The physical shape of CDs also complicated the design and size of a portable player. So while the CD was in many ways an improvement over vinyl records, it was not the ideal replacement for cassette tapes.

 

Phillips attempted to introduce a new consumer digital cassette format, and Sony and Phillips also worked together to create the higher-end Digital Audio Tape format, but both suffered from the flaws inherent with tape: physical wear and stretching, magnetic erasure, dust contamination, the complexity of mechanical tape transports, and tape spooling that made fast forwarding to find a song a very slow process.

 

In order to deliver the benefits of both cassette tape and CD, Sony introduced its own new format in 1991: MiniDisc. The new format offered a portable, compact form factor and could record like cassette tapes, but also offered the optical digital sound, media durability, and instant access of CDs.

 

Digital's Death by Restriction

Unfortunately, the music industry was so worried that the MD, DAT, and other digital formats would be used to illegally duplicate music that it introduced severe use restrictions and complexity for digital players that ended up killing their adoption, particularly in the US market.

 

The RIAA had Congress pass the Audio Home Recording Act in 1992, which demanded royalties on all digital recording equipment and blank media, and required Serial Copy Management System restrictions be included on all new consumer audio recorders, to prevent music from being digitally duplicated beyond one generation.

 

The legislation was supposed to ensure that consumers would have access to new digital recording technology for private noncommercial use without the threat of being sued by copyright owners, but the actual result was to drive up the price of digital recorders, while making them nearly useless to consumers due to the excessive built-in hardware restrictions.

 

The CD-R Revolution

The machinations of the RIAA and Congress were eventually skirted by the arrival of new technology. The audio CD had been adopted for computing use as CD-ROM, a high density storage system at a time when the 650 MB capacity of CDs was many times larger than any available hard drive.

 

CDs were not originally designed to support recording, but the obvious applications for re-writable CD-ROM resulted in the development of technology to burn special blank CD media in a way that created discs that could be read by existing CD players. Since CD-ROM was simply an audio CD with additional directory information, it was suddenly possible for consumers to create their own audio CDs.

 

The actual digital audio data of a CD was too big for users to manipulate; until the mid 90s, copying an entire raw audio CD into a computer was simply impossible. Users needed a way to compress the raw AIFF CD audio down to a manageable size, but this took a lot of processing power.

 

By the mid 90's, home computers were just gaining the CPU capacity required to quickly rip CD audio into a compressed MP3 audio file. The MP3 format rendered the music on a CD into files a fraction of their original size, and unleashed new applications for audio use on computers.

 

The digital equivalent to the mix tapes of the 80s had been repressed by law and economics for so long that this new ability to rip music exploded onto the scene without any market to accommodate users, who wanted to use MP3 files in the same way they'd used tapes a generation prior.

 

Instead of offering reasonably priced digital music, the music industry tried to lock everything down, either to hardware media or to proprietary formats with excessive use restrictions. That left music trading sites the most practical way to obtain digital music.

 

The iPod Arrives

Digital files not only sounded better than cassette tapes, but could also provide other features. For example, digital systems could index and display the name and artist of a song as it played. Managing this meta data made creating the digital equivalent of a mix tape a more complex task.

 

When Apple introduced the iPod in October of 2001, it was, like most competing digital music players, a simple device that played plain MP3 files. Apple differentiated the iPod by leveraging its QuickTime technology to transfer much of the complexity in managing songs, meta data, and playlists to the integrated iTunes software running on a computer.

 

This not only made the iPod simpler, but allowed Apple to swallow the market by offering consumers something rivals weren't: a digital experience with the simplicity of an 80's mix tape.

 

While Apple worked to make its iTunes and iPod combination easier to use, rivals seemed hell bent on making things more complex: Sony with ATRAC, and Microsoft with Janus.

 

Killed by Complication

Sony, having acquired Columbia Records in 1988, was now aligned behind music industry interests. It had long sought to replace the open MP3 format with its own ATRAC audio compression scheme in order to retain control over digital music files and limit the potential for music file sharing.

 

However, its customers were turned off by having to re-encode all their music, and the software Sony provided was obtuse, clumsy, and problematic, in stark contrast to its often stylish and elegant hardware.

 

While Sony worked to establish ATRAC, Microsoft determined to take over control of digital music and media with its Windows Media by giving its existing DRM system godlike powers and the name of a deity: Janus.

 

The Zune isn’t just an iPod rival, it’s part of Microsoft’s efforts to further enslave consumers to a profit engine designed to suit the desires of the music industry, ignore consumers’ fair use rights, and destroy open content.

 

Over the top? Take a look at the history of Microsoft's efforts in the music industry and judge for yourself.

 

The Danger of DRM described the world before DRM and the complications that killed a decade of digital products prior to the iPod. It also introduced the new god Microsoft hoped would take over the digital universe: Janus.

 

The Watchful Eyes of Janus

Microsoft worked with media producers to design a comprehensive technology framework and DRM system named after Janus, the Roman god of beginnings and endings and the namesake of January, who was portrayed with two faces that looked both into the past and into the future.

 

Like its namesake, Microsoft's Janus planned to keep its eyes on everything, with airtight solutions for the paranoid entertainment industry that would allow them to both sell and rent locked down digital files. Rented files could be set to playback for a certain time period or number of plays and then self-destruct.

 

Windows Media files could also be set to allow or deny duplication, burning to CD, or copying to a portable player. Portable systems would be forced to register with a central authority, so if the user stopped paying ongoing rental subscription fees, the device would stop playing.

 

Microsoft planned to license Janus to hardware makers and online stores to create a secure, comprehensive platform for distributing songs and movies. The industry largely assumed that Microsoft's DRM technology would quickly become the de facto standard, and offered little criticism of Microsoft's technology.

 

Janus of All Trades, Master of None

While the options enforced by Janus offered lots of flexibility to media producers, they created confusion, complexity, and excessively strict and inconsistent limitations for users. A selection of media files might each have different sets of restrictions, depending on the whim or greed of the entity offering it for sale.

 

Further, the rules governing the transactions between media producers and consumers could change anytime at the whim of producers, leaving buyers with media that suddenly stopped working or behaved differently.

 

No consideration was made for fair use provisions; consumers got whatever producers decided to offer. Microsoft hoped to choke out all competition, making its Janus-based WMA format the only way to obtain commercial digital music.

 

The resulting Windows Media experience was nothing like an 80’s mix tape; it had more in common with a PC: complex, confusing, inconsistent, and frustrating.

 

FairPlay Strikes a Balance

If the iPod hadn't been introduced, Microsoft's Janus would only have to compete against Sony's solo ATRAC effort with its poorly implemented software and online store, Real's similar Helix DRM, and the technology offerings of Open Source projects that offered--by design--no user limitations on mass duplication at all.

 

To expand upon the success of the iPod, Apple designed a music protection system that struck a balance between the demands of media producers and the desires of consumers for a simple, easy to use system with consistent rules and reasonable prices.

 

Steve Jobs warned the music industry that any DRM system would eventually be compromised, so rather than attempting to build a highly restrictive system that assumed all consumers were brazen thieves, it would be best to deliver a simple and consistent one that focused on developing a business with honest consumers willing to pay for an experience superior to the online file sharing sites.

 

The music industry took a lot of convincing. After the initial failure of Microsoft's Janus to materialize, Apple convinced music labels to take a limited risk in selling exclusively to the Mac market.

 

The iPod’s Optional DRM

The iTunes Store opened in April of 2003, a year and a half after the iPod was first released. It quickly became the first online music store to record significant sales, selling a million songs in its first three days.

 

While Apple has since old over a billion and a half tracks with its FairPlay DRM, the iPod has no restrictions to prevent the use of open content, and iTunes does not add any DRM to podcasts or Internet radio streams.

 

Unlike Sony and Microsoft, Apple has never thwarted users ability to play regular MP3 music. Prior to WMP 10, Microsoft applied DRM by default to songs users ripped from their own CDs. Sony only recently decided to allow its users to play back MP3 files on its latest products.

 

Apple has never applied DRM to user’s own music, and dealing with FairPlay and the iTunes Store is completely optional. There are many iPod users outside of the US who can’t even access Apple’s music store.

 

Janus Stumbles

Microsoft's confidence in Janus was slightly shaken by rapidly increasing sales of both the iPod and music tracks through the iTunes Store, but the company was sure that as soon as it unleashed its own brand of portable DRM, the music industry would standardize on it and Apple's efforts would be strangled like another Netscape or Java.

 

Instead, Microsoft's efforts to roll out Janus fell into problems. The technology wasn’t rolled out in January 2003 as promised, but slipped deep into 2004, leaving Apple a year and a half lead.

 

Microsoft’s pre-Janus Wndows Media DRM had been around since 1999, but consumers hadn’t paid any attention because all it did was restrict media playback to a PC. Consumers didn’t want DRM, they wanted a marketplace for digital music that was fair, functional, useful, and understandable.

 

In rolling out the new portable DRM technologies in Janus, Microsoft found itself at the mercy of partner stores and manufacturers, each working at cross purposes. Further, the vast majority of customers didn't find music subscriptions very compelling. This was complicated by the confusing variety in players and stores, only some of which supported portable devices and subscriptions plans.

 

Rather than offering customers a better experience than mixed tapes in a Walkman, Microsoft's Janusland of players and stores was too complex and too restrictive to hold consumers attention.

 

At the same time, Apple had extended the iTunes Store to Windows users, and quickly picked up everyone else interested in buying music online. That left Microsoft with a tough remaining market to crack: the users who didn't like Apple and didn't like paying for music.

 

Microsoft burned through efforts with Napster, Yahoo, WalMart, and MTV but nobody seemed able to sell Janus to customers. Microsoft rebranded Janus as PlaysForSure, but the market didn't respond appreciatively. It wasn't just bad marketing, it was a bad product that consumers were avoiding.

 

Facelifts for Janus

After two embarrassing holiday season failures in 2004 and 2005, Microsoft determined that if it wanted to establish Janus, it would need to do it itself. The company picked a PlaysForSure player from Toshiba as a starting point, and sought to build on features that could challenge the iPod.

 

In order to distance itself from the PlaysForSure failure it created, Microsoft decided its own Zune player would use an altered version of Janus that rendered the stores and players of its former partners incompatible and therefore obsolete.

 

A series of articles have already called into question Microsoft's engineering and marketing efforts with the Zune:

 

•iPod vs Zune: Microsoft's Slippery Astroturf

•iPod vs Zune: A Buyer's Guide

•The Danger of DRM

•Strike 3: Why Zune will Bomb this Winter

•Ten More Myths of Zune, part 2

•Ten More Myths of Zune

•The Secret Failures of Microsoft

•Why Microsoft Can't Compete With iTunes

•10 iPod vs. Zune Myths

•The iTunes Monopoly/Failure Myth

•10 Ways Microsoft Can Salvage their iPod Killer

•Why Apple is Winning in Media Downloads

•The Apple iTMS vs Amazon Unbox Rivalry Myth

•New Media and Free Market Choice

•The Online Music and Movie Rental Myth

•The Microsoft iPod-Killer Myth

 

However, the real problem with Zune is that Microsoft has grown so desperate to end its years of failure in online sales of music that it has instigated a plan to revert digital music back to the dark days of DAT and MiniDisc.

 

Microsoft has voluntarily initiated an RIAA tax on its Zune profits--profits that don't exist and likely won't for some time--in an effort to poison the market for Apple and other manufacturers of digital media devices.

 

This poses little problem Apple, which has used its market power in the past to prevent the RIAA from arbitrarily raising prices and adding tough new restrictions to digital media. However, it sets a precedent that will be very difficult for independent manufacturers to avoid following.

 

This All Happened Before

This isn't the first time Microsoft has gambled using future profits it knew it would never make. The company licensed its web browser from SpyGlass in exchange for ongoing royalty payments, but then shipped SpyGlass (aka Internet Explorer) for free as a price dumping attack on Netscape. That allowed Microsoft to destroy existing competition without risking--or developing--anything.

 

The biggest loser was Microsoft's naive partner, but consumers also ended up with another product category overwhelmingly dominated by Microsoft. Once competition was destroyed, Microsoft's monopoly product fell behind and became another unresponsive, unaccountable mess of viruses, spyware, and security flaws.

 

Microsoft has an established pattern of dominating product categories, then falling back into a comfortable position of delivering bad, anti-consumer products which slow progress and development.

 

It's called embrace and extinguish. Microsoft has attempted to put out every market that's ever been considered hot, from cross-platform and open source development to handheld computing and TV media devices.

 

The company talks about choice, but really works to prevent consumer choice. It is allied with content producers to push products and services that put consumers at a disadvantage, and has worked to kill interoperability and open content.

 

Microsoft is looking for suckers willing to sign away their rights and undermine the rights of others: to join in, all you have to do is buy a Zune. A poisoned payoff to the RIAA is included in the price.

 

Microsoft's Passion Power Play

Right now, Microsoft is trying to kill the only thing it's never been able to rub out: Apple's QuickTime, which has been a thorn in Microsoft's side since its arrival fifteen years ago.

 

Microsoft sought to kill it as a baby, and has been busy spreading a misinformation campaign against it every since, first by proclaiming that all music on iPods is stolen, then suggesting along with former partner Napster that it costs $10,000 to use an iPod.

 

This winter, Microsoft has appealed to corrupt authorities in a last ditch effort to kill off Apple's growing following and execute its leading product as an example for anyone contemplating a challenge to Microsoft's position of power and dominance.

 

I wish Microsoft a very unhappy holiday season."

 

 

So what you were talking about informed opinion?

 

And yes Apple Fairplay is a not too bad DRM system, remeber Apple got with Flat Prces for all their music in ITS against the will of the Record companies because Apple got a Strength, do you think a myriad of mini online sellers could oppose them? no kidding please...

 

Aberracus

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Good job ignoring basically everything my post but I'm used to you people ignoring things, I assume (Your area of expertise, I know) it's mostly you can't.

 

It's against their will ? No, not really, it may be against the 'will' (If it truly was they simply wouldn't let Apple get away with it, so they may dislike it but it's not quite 'against their will') and there is that story from the RIAA (IIRC or was it some other group ?) where 70 cents (Lower than Apple's price) is 'in the correct range.'

 

Don't ever 'cite' roughlydrafted, that Eran guy is a moron, it's quite a known fact. Oh, and long posts like that are just annoying on forums, don't do it again, please.

 

- I'm still waiting for an apology for your pathetic and over-assuming personal attack.

Edited by robotskip
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I didn't ignore anything, in my post (its long sorry i tried to resume it in my first post) you can find all the answers for your questions. :)

 

Im not an apple fanboy, but man you are a MS lover, thats it, i would not apologize for saying it.

 

Now please return AS I HAD to the theme of the thread.

And you can't dismiss someone informed opinion as a Moron (in such a tipically MSlover way).

Edited by aberracus
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Return ? You haven't returned at all.

 

You have ignored:

 

- Explaining how MS' DRM is more 'secure'

- How you could attempt to say Apple (Aside from allmp3) is the only legal online seller

- Further explanation upon the iTunes/iPod being better for customers/owners and the Zune association

- Your reason that ripping being possible somehow makes Fairplay 'better'

 

Why am I a 'MS lover' ? I thought you had 'returned' to the theme of the thread ? I wasn't aware that was the theme. And like I said, stop with the [inaccurate] personal attacks.

 

I didn't dismiss an informed person, I dismissed someone who is known to skew facts, make up things, use illogical reasoning, etc. Go find a /. discussion about Daniel Eran, it easily rips him apart and shows how incorrect he is.

Edited by robotskip
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Explaining how MS' DRM is more 'secure'
Windows Media files could also be set to allow or deny duplication, burning to CD, or copying to a portable player. Portable systems would be forced to register with a central authority, so if the user stopped paying ongoing rental subscription fees, the device would stop playing.

While the options enforced by Janus offered lots of flexibility to media producers, they created confusion, complexity, and excessively strict and inconsistent limitations for users. A selection of media files might each have different sets of restrictions, depending on the whim or greed of the entity offering it for sale.

 

Further, the rules governing the transactions between media producers and consumers could change anytime at the whim of producers, leaving buyers with media that suddenly stopped working or behaved differently.

 

No consideration was made for fair use provisions; consumers got whatever producers decided to offer. Microsoft hoped to choke out all competition, making its Janus-based WMA format the only way to obtain commercial digital music.

 

How you could attempt to say Apple (Aside from allmp3) is the only legal online seller

you dont read carefully.. allofmp3 is absolutely illegal, ther are other digital music vendors, they just doesnt have market share (MS is one of them)

 

Further explanation upon the iTunes/iPod being better for customers/owners and the Zune association
read next... and In this case, Janus and PlaysForSure were rebranded under the Zune logo. As that "new" product's dramatic failure unfolds, Gates has inexplicably lashed out at “DRM,” which quite pointedly means Apple's competing iTunes, the only DRM system that has succeeded in the market for online music.

 

Your reason that ripping being possible somehow makes Fairplay 'better'

it gives the user OPTIONS, they can move their own music around to their cars or boats, or stereos

 

When you talk with informed facts in hand and with reason and logic in your words you cant be called a moron, unless you are a blind MSLover, your choice :)

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